The Guaraní occupied the region between the Paraguay and Paraná rivers long before the arrival of Europeans (about 2000–1000 BCE). They were a Tupian-speaking people, and in most respects their customs resembled those of the other Indians in the tropical forests. The women cultivated corn (maize), cassava (manioc), and sweet potatoes, and the men hunted and fished. They were warlike, seminomadic people who lived in large thatched dwellings grouped in villages; each village was surrounded by a defensive palisade. In the 15th century raiders from the Gran Chaco region made frequent attacks upon Guaraní tribes. Crossing the Paraguay River, the Guaraní retaliated and subdued their enemies, carrying the conflict into the margins of the Inca empire. They were, therefore, the natural allies of early European explorers who were seeking short routes to the mineral wealth of Peru. Alejo García, making his way from the Brazilian coast in 1524, and Sebastian Cabot, sailing up the Paraná in 1526, were the earliest of these explorers to reach the area.

Colonial period

The first colonial settlements were established by Domingo Martínez de Irala in the period 1536–56. The first Spanish colonists, unsuccessful in their search for gold, settled peacefully among the Guaraní in the region of Asunción, the present capital of Paraguay. These first settlers established their notorious “harems” of Guaraní women; their ethnically mixed descendants gradually grew into the rural population of modern Paraguay, which still considers itself to be Guaraní in custom and habit. With Asunción as his principal base, Irala laid the foundations of Paraguay and made it the centre of Spanish power in southeastern South America. Irala’s colonization policy involved the delimitation of the boundary with Brazil through a line of forts against Portuguese expansion, the foundation of villages, the settlement of the Guaraní to provide food, labour, and soldiers, and extensive Guaraní-Spanish intermarriage. Rapidly, a national and fairly homogeneous amalgam of Indian and Spanish cultures came into being.

For more than 150 years from early in the 17th century, Jesuit communal missions in the Paraná and Uruguay basins of southeastern Paraguay governed the lives of 150,000 Indians in 30 reducciones, or settlements. These were centres of religious conversion, agricultural and pastoral production, and manufacturing and trade; they served also as strategic outposts against Portuguese expansion from southern Brazil. Isolated from the heart of Paraguay, which centred on Asunción, the missions became an autonomous military, political, and economic “state within a state,” increasingly exciting the envy of the Spanish landowners in the Asunción area. In the period 1721–35 the latter waged a struggle to overthrow the Jesuit monopoly of Indian trade and labour. Unaided, the settlements also had to defend themselves against slave raiders from São Paulo and, in 1754–57, a combined Spanish-Portuguese attack that was designed to enforce a territorial partition of the mission settlements. Defiance of such powerful groups paved the way for the expulsion of the Jesuits in 1767. The settlements were abandoned, the Indians were absorbed by either the landed estates or the jungle, the settlements fell into ruin, and economic activity ceased.

In 1776 the new Viceroyalty of the Río de la Plata was created, with its capital in Buenos Aires. This effectively made Asunción and all of Paraguay dependent on Buenos Aires, thus ending the region’s colonial dominance.

Struggle for independence

As the power of Buenos Aires grew, the leaders of Paraguay began to resent the decline in their province’s significance, and, although they had early challenged Spanish authority, they refused to accept the declaration of Argentine independence in 1810 as applying to Paraguay. Nor could an Argentine army under Gen. Manuel Belgrano enforce Paraguayan acceptance, as Paraguayan militia repulsed Belgrano’s forces in 1811. Later, however, when the Spanish governor sought assistance from the Portuguese in defending the colony from further attacks from Buenos Aires, he underestimated the nationalistic spirit of the Paraguayans. Under the leadership of the militia captains Pedro Juan Cabellero and Fulgencio Yegros, they promptly deposed the governor and declared their independence on May 14, 1811.

Establishment of the republic

The Francia regime

A governing junta was soon established, led by Yegros but in reality dominated by a civilian lawyer, José Gaspar Rodríguez de Francia. Francia proposed the idea of a confederation of equals to Buenos Aires. The city was hoping for eventual domination but settled for a vague military alliance, which was signed in October 1811. This constituted de facto recognition of Paraguayan independence, and, when Buenos Aires attempted to use the alliance to acquire Paraguayan troops for its own interprovincial quarrels, the accord became void. Buenos Aires’s response was to blockade Paraguay. In the face of regional fragmentation, Buenos Aires sent Nicolás de Herrera to Asunción to frighten, bluff, or bribe Paraguay into a union of unequals. Francia responded by convening a congress, which on Oct. 12, 1813, formally declared Paraguay an independent republic and rejected further treaties with Buenos Aires. A consulate of two men, Yegros and Francia, was established to rule the republic for a year.

At the end of that year, a new congress met and proclaimed Francia supreme dictator of the republic for a period of five years; in 1816 a third congress made him perpetual dictator, and his will was the law in Paraguay for an additional 24 years. El Supremo, as he was known, prohibited any political activity, stripped the church of its holdings and power, confiscated the wealth of the small Spanish elite, abolished the municipal government of Asunción, and generally isolated Paraguay from its rather hostile neighbours. In 1820 El Supremo found out about a plot to depose him and restore the native elite to power. Hundreds of arrests were made, and in the following year at least 68 men of the traditional Paraguayan aristocracy (including Fulgencio Yegros) were executed. Their wealth in land and slaves became part of the national patrimony, and well before Francia’s death (1840) the state came to own a vast proportion of the country. With the borders sealed, Paraguay became of necessity almost self-sufficient; only a small, carefully regulated commerce was permitted with Argentina and Brazil. Uninvited foreigners were often held for years under loose arrest in the interior.

The start of modernization

When Francia died, he left behind a quietly prosperous country that had adjusted well to what amounted to state socialism, but he also left a country of rustics with no political experience and a strong tradition of dictatorial rule. In 1841 a second consulate emerged from the chaos in the figures of a civilian, Carlos Antonio López, and a soldier, Mariano Roque Alonso. It was soon clear that López was the true ruler of Paraguay, and in 1844 a congress named him president. The same congress promulgated a constitution, notable for the great powers accorded the president and the absence of the word liberty from its text. López devoted much of his two decades in power to opening the country slowly to the wider world and to modernization. Doing so provoked international crises, and it was not until after the fall of the Argentine dictator Juan Manuel de Rosas in 1852 that Argentina recognized Paraguayan sovereignty and eased its stranglehold on the rivers leading to the sea.

Paraguay’s conflicts with its neighbours

While López was attempting to modernize Paraguay, he also had to attend to border crises with Brazil and Argentina. These crises convinced him that Paraguayan modernization should proceed along military avenues. Thus, hundreds of foreign engineers, medical workers, scientists, machinists, and advisers were put to work on military projects. López was threatened by a major Brazilian naval expedition on the Paraná River in 1855; in 1858 a large flotilla of the U.S. Navy appeared to force a solution to a complex diplomatic issue, but British war vessels captured and held for a time the flagship of the small Paraguayan navy. In most of these contretemps, López was forced to give in, and the consequent humiliation lent greater urgency to his desire to strengthen Paraguay’s defenses. By the time of his death, in September 1862, he had created a major regional military machine. López, a cautious man, warned his eldest son, Francisco Solano López, who was to succeed him, not to use the new military might capriciously but to settle disputes through diplomacy and negotiation.

War of the Triple Alliance

Francisco Solano López in 1862 was the inexperienced, spoiled son of an iron-willed dictator. He overestimated the military strength of his country and felt that Paraguay should have a larger voice in the affairs of the region. Thus, when Uruguay, wracked by civil war, was threatened with intervention by Brazil, López took an increasingly bellicose position. When Brazil ignored his warnings and ultimatums and invaded Uruguay in August 1864 to support a pro-Brazilian faction in the civil war, López decided to use the strength of his military machine. In November he ordered the capture of a Brazilian war steamer and sent units of his army and navy north to invade the Mato Grosso Plateau, simultaneously preparing a larger army corps to strike south to destroy the Brazilian army in Uruguay. When Argentina denied his request for transit of a Paraguayan army, he declared war on Argentina as well, in March 1865. In May, as Paraguayan troops were approaching, a puppet Uruguayan government signed the Treaty of the Triple Alliance with Brazil and Argentina, committing all three to the war against Paraguay.

The Paraguayan force heading southward was destroyed at Uruguaiana, in Brazil, and a strike into northeast Argentina resulted in heavy Paraguayan casualties and the virtual destruction of López’s fleet in 1865. Much of the rest of the war was fought in southwestern Paraguay, near and around Humaitá. In May 1866 López threw the elite of his army into suicidal attacks against allied forces at Tuyutí, losing almost 20,000 of his best men. Other lost battles in 1866–68, as well as widespread epidemics of Asiatic cholera, devastated the population of the country. In 1869 and 1870 the tragedy was completed as López, pursued by large allied forces, retreated through the interior of his country with a shattered army and thousands of civilian refugees, dragging famine, disease, and death in his wake. Perhaps by this point unhinged, he ordered the executions of hundreds of people, including his own two brothers, two brothers-in-law, and scores of his officers. Finally, on March 1, 1870, his last camp was attacked at Cerro Corá by Brazilian cavalry, and López died in combat. His country by then lay in ruins, with more than half of its former population dead. A Brazilian occupation army remained, further draining the country, until 1876. This Paraguayan War, or War of the Triple Alliance, was one of the bloodiest in Latin American history.

Reconstruction

Under a liberal constitution promulgated in 1870, Paraguay began a painful reconstruction. Only the mutual jealousies of Brazil and Argentina prevented the country from losing much of its territory. As a result, Brazil gained no lands that it had not actually occupied before the war, and Argentina’s claims to most of the Chaco were reduced considerably when, in arbitration, U.S. Pres. Rutherford B. Hayes decided one key boundary issue in 1878 in favour of Paraguay. When the army of occupation was removed in 1876, it left a crowd of Paraguayan politicians noted for their corruption and ambition. In 1887 Paraguay’s two major political parties, the Liberal Party and the National Republican Association (Asociación Nacional Republicana; ANR), generally known as the Colorado Party, were born. The Colorados were in power from 1887 until a liberal revolt unseated them in 1904, and the Liberal Party, in their turn, dominated the presidency for the next 30 years.

The Chaco War

Paraguay’s reconstruction was complicated by a dispute with Bolivia concerning boundaries in the Chaco. The dispute was exacerbated when, in the 1880s, Bolivia lost its seacoast in the War of the Pacific with Chile and, seeing the Chaco as a possible outlet to the sea via the Paraná River, began to penetrate it with soldiers and colonists. By the 1920s, armed clashes began to take place as Paraguay moved into the region in greater force. As Paraguay was frantically trying to arm itself, a Bolivian force stormed a Paraguayan fort on June 15, 1932, and the war began. The Paraguayan president, Eusebio Ayala, gave a military carte blanche to Gen. José Félix Estigarribia, who gradually pushed the Bolivians back until they were almost entirely ejected from the Chaco. Through foreign mediation, a cease-fire was attained on June 12, 1935, and a peace treaty was signed three years later, awarding Paraguay three-fourths of the Chaco.

In February 1936, Ayala and Estigarribia were imprisoned following a military coup known as the Febrerista revolt, conducted by radical officers. The inept new government soon fell, however, and Estigarribia was elected president in 1939.

On Sept. 7, 1940, before he could actually implement a new constitution that gave him great authoritarian powers, Estigarribia was killed in an air crash. He was replaced by Gen. Higinio Morínigo, a harsh opportunist, who immediately persecuted the Liberals and rewarded the Colorados. A revolt of Liberals and other groups in 1947 caused a civil war that again devastated the country. Morínigo was deposed by the Colorados themselves in 1948. In the next six years, Paraguay had six weak presidents, and then, in 1954, Gen. Alfredo Stroessner, supported by both the Colorados and the army, seized power.

The Stroessner regime

The authoritarian Stroessner, with aid from the United States and later Brazil, managed to stabilize one of the world’s least stable currencies, attract foreign investment, and embark on large public works projects. Paraguayan isolation was broken down. However, harsh rule was not relaxed after 1960. Though elections on all levels were permitted, the Colorado Party never lost, and Stroessner was duly reelected every five years with a huge plurality. The church alone continued to object to the repressive aspects of the regime, such as the inhumane treatment of the Indian minority and censorship. Relations with the United States deteriorated throughout the 1970s, and U.S. aid was much reduced. Partly because of this, the Stroessner government aligned itself closely with the authoritarian regime in Brazil, which offered aid and political support. The two countries cooperated in the building of the immense Itaipú hydroelectric plant on their shared border. As a result of this project, the national economy briefly improved, but it took a downturn in the early 1980s, causing some protests against the Stroessner regime.

The government showed little tolerance for opposition to its policies; most of the main opposition leaders were kept forcibly in exile. Such repression focused international attention on Paraguay for human rights violations, further hampering the country’s foreign relations and intensifying economic stagnation. The aging Stroessner, who had been elected in 1983 for a seventh term, also had to deal with dissension within his own Colorado Party that pitted the traditionalist, or “moderate,” wing of the party against the “militant” wing. The former sought to open the political and economic system somewhat, whereas the latter favoured continuation of the policies of the Stroessner regime and wanted Gustavo Stroessner to succeed his father whenever he stepped down from office. Factional discord rocked the Colorado Party, resulting in a partial purge of the traditionalists in 1988, and it appeared briefly that the militants were firmly in control. The traditionalists, however, were simply lining up their forces for the inevitable conflict. On Feb. 3, 1989, Stroessner was overthrown in a coup led by his erstwhile top military commander, Gen. Andrés Rodríguez, who announced that democracy had come to Paraguay.

Democratic freedoms

Elections were held on May 1, 1989, and Rodríguez was elected president (by a 74 percent plurality). The opposition parties had not had much time to organize for the electoral contest, and control of Congress remained with the Colorado Party. The party also remained in control of the judiciary, and Rodríguez’s cabinet included a number of military officers. Moreover, there was some concern over the fact that Rodríguez had never changed his active-duty military status. Nonetheless, a new constitution went into effect on June 20, 1992, and the president adopted certain democratic measures. He declared freedom of the press, legalized all political parties, repealed a number of repressive laws, ratified the human rights treaties of the United Nations and Organization of American States, and freed the country’s remaining political prisoners.

Despite the establishment of democratic liberties, the armed forces remained a key power in Paraguay. Army Chief Gen. Lino Oviedo soon emerged as a major figure. He engineered the selection of Juan Carlos Wasmosy as the candidate of the Colorado Party in the 1993 presidential elections; Wasmosy won the election and became Paraguay’s first civilian president since 1954. But Oviedo and Wasmosy had a subsequent falling out, leading to a rebellion in April 1996, when only strong diplomatic pressure was able to avert a military coup. Oviedo retired from active service and reemerged as a Colorado Party front-runner in the 1998 presidential race, but Wasmosy retaliated by arresting Oviedo on charges arising from his 1996 coup attempt. Oviedo’s vice presidential running mate, Raúl Cubas Grau, replaced Oviedo as the party candidate and won the presidency for the Colorado Party with a convincing majority.

Three days after assuming office, in August 1998, President Cubas released Oviedo from jail and refused to return Oviedo to confinement even after the Supreme Court ruled his actions unconstitutional. A political impasse was broken following the assassination of Vice President Pres. Luís María Argaña, on March 23, 1999. Fearing military intervention, thousands of student demonstrators protested outside the National Congress building in Asunción, calling for the arrest of Oviedo, who was widely suspected of being involved in the assassination. Later that week, Oviedo supporters fired on the demonstrators, killing eight and wounding many. But this provocation failed to disperse the crowds. President Cubas resigned and was granted asylum in Brazil; meanwhile, Oviedo fled to Argentina.

At the end of March, Luis González Macchi, former head of the Senate, was sworn in as president to head a new “government of national unity,” comprising members of all three major political parties. Under strong external pressure from the United States and the International Monetary Fund, the new government announced its commitment to reform civil service, to privatize industry, and to mandate greater civilian control over Paraguay’s armed forces. But Colorado Party supporters of the assassinated vice president and former members of the Stroessner regime occupied key positions in the new government. They remained wedded to a corporativist style of politics that was opposed to fundamental reform.

Paraguay in the 21st century

After a decade of stagnation, the Paraguayan economy revived, spurred by rapid growth in soybean production. Indeed, Paraguay was one of the world’s largest exporters of soybeans at the beginning of the 21st century. However, despite faster economic growth, unemployment and crime rates remained high as the government failed to address the urgent need for land reform and industrialization. There was growing resentment at Paraguay’s subordinate role within the region, including calls to leave Mercosur. Also of concern were the terms of the hydropower Itaipú Treaty with Brazil (1973), which many Paraguayans saw as inequitable. Gonzalez’s term in office was scarred by corruption charges, and on April 27, 2003, Colorado Party candidate Nicanor Duarte Frutos won the presidential election, promising to fight corruption in his party and in his country. During his presidential term Duarte removed six judges from the Supreme Court who were suspected of corruption, introduced tax reforms, and pursued efficient macroeconomic policies. In June 2004 Oviedo returned from exile and was imprisoned for his 1996 convictions; he was paroled in 2007. In the historic 2008 presidential election, former bishop Fernando Lugo of the centre-left coalition Patriotic Alliance for Change (Alianza Patriótica para el Cambio; APC) defeated Blanca Ovelar of the Colorado Party, ending that party’s 62 years of continuous rule.

In 2009 it was discovered that Lugo had fathered a son while he was still a bishop. Other paternity claims were filed against him shortly afterward. Lugo was urged to step down, but he said that he would fulfill his five-year term. In April 2009 Lugo and Bolivian President Pres. Evo Morales signed an accord settling the border dispute over the Chaco region that had caused the Chaco War in the 1930s. They blamed foreign intervention for fueling the war. In 2010, largely in response to his advocacy of Venezuela’s ascent into Mercosur, Lugo lost the support of Vice Pres. Federico Franco, who had been a key player in the broad coalition that brought Lugo to power.

Lugo’s attempts to introduce land redistribution were blocked by ranchers and large landowners, as well as by the Colorado Party. After 17 people were killed when peasant farmers clashed with police who were evicting them from land in eastern Paraguay on June 15, 2012, Lugo came under criticism that culminated in his impeachment by the Chamber of Deputies on June 21. The next day the Senate quickly convicted Lugo of incompetence (39–4), removed him from office, and replaced him with Franco. Initially Lugo acceded to his dismissal, but within days he sought its reversal, calling the action a “parliamentary coup.” A number of Paraguay’s neighbours also questioned the legality of Lugo’s removal, including Argentina, Brazil, and Uruguay, all of which recalled their ambassadors from Paraguay.